MillerKnoll, Inc. · NASDAQ:MLKN
MillerKnoll — Miller Herman — Investor Day (March 2017)
61 slides from MillerKnoll's investor day presentation, Mar 27, 2017
Slide 1: Delivering Growth by Design: Investor Event at New York Flagship
Delivering Growth by Design NASDAQ: MLHR Investor Event at New York Flagship March 27, 2017
Slide 2: Forward-looking statements
2 This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about
Slide 3: Our Strategic Intent
3 Our Strategic Intent Expand Addressable Market Build Multi-Channel Capability
Slide 4: Our Goals
4 Our Goals *Measured as interest, dividends and share repurchase as a % of EBITDA on a trailing 3-year basis 30 35% OF EBITDA 2 2.5x THE RATE OF SALES GROWTH 3 6%TO TO TO ORGANIC SALES GROWTH OPERATING INCOME GROWTH CASH RETURNS TO INVESTORS*
Slide 5: Areas of Focus
5 Areas of Focus REALIZE LIVING OFFICE SCALE CONSUMER LEVERAGE DEALER ECO-SYSTEM DELIVER INNOVATION DRIVE COST SAVINGS
Slide 6: Accelerating Strategic Execution
6 Accelerating Strategic Execution BRIAN WALKER CEO Joined 1989 JEREMY HOCKING EVP, Strategy and Business Development Joined 1984 JOHN EDELMAN CEO, Herman Miller Consumer Joined 2014 JEFF STUTZ Chief Financial Officer Joined 2001 GREG BYLSMA President, North America Contract Joined 2000 BEN WATSON C
Slide 7: North America Contract
7 North America Contract Greg Bylsma President, North America Contract
Slide 8: North America Contract overview
8 Design, manufacture and sale of furniture for office, healthcare and education environments in US and Canada OFFICE HEALTHCARE EDUCATION North America Contract
Slide 9: Financial Metrics North America Contract
9 Financial Metrics North America Contract NORTH AMERICA CONTRACT $1,332M 5 YEAR REVENUE GROWTHFY16 REVENUE FY16 ADJ. EBITDA MARGIN + 2% (GAAP) + 4% (organic) 13.5% 59%
Slide 10: Dealer Eco-System: Key Initiatives
10 DEALER ECO-SYSTEM North America Contract | Key Initiatives
Slide 11: Sales Leverage: Key Initiatives
11 SALES LEVERAGE North America Contract | Key Initiatives
Slide 12: Living Office 2.0: Key Initiatives
12 LIVING OFFICE 2.0 North America Contract | Key Initiatives
Slide 13: Automation: Key Initiatives
13 AUTOMATION North America Contract | Key Initiatives
Slide 14: Consumer
14 Consumer John Edelman CEO, Herman Miller Consumer
Slide 15: Consumer overview
15 DESIGN WITHIN REACH | CAMBRIDGE, MA STUDIO HERMAN MILLER FLAGSHIP | NEW YORK CITY Sale of modern design furnishings and accessories in North America through brick and mortar studios, contract, eCommerce, catalog and wholesale channels Consumer
Slide 16: Catalog & eCommerce
16 CATALOG & ECOMMERCE Consumer
Slide 17: Financial Metrics Consumer
17 Financial Metrics Consumer CONSUMER $289M 5 YEAR REVENUE GROWTH + 39% (GAAP) + 12% (organic) 5.8% FY16 ADJ. EBITDA MARGIN 13% FY16 REVENUE
Slide 18: Real Estate Transformation: Key Initiatives
18 REAL ESTATE TRANSFORMATION Consumer | Key Initiatives
Slide 19: Proprietary Product Mix: Key Initiatives
19 PROPRIETARY PRODUCT MIX Consumer | Key Initiatives
Slide 20: DWR Contract: Key Initiatives
20 DWR CONTRACT Consumer | Key Initiatives
Slide 21: Logistics Optimization: Key Initiatives
21 LOGISTICS OPTIMIZATION Consumer | Key Initiatives
Slide 22: Mobile / Online Expansion: Key Initiatives
22 MOBILE / ONLINE EXPANSION Consumer | Key Initiatives
Slide 23: ELA Furniture Solutions
23 ELA Furniture Solutions Andy Lock President, International
Slide 24: Financial Metrics ELA Furniture Solutions
24 Design, manufacture and sale of furniture primarily for office settings in EMEA, Latin America and Asia-Pacific Financial Metrics ELA Furniture Solutions ELA FURNITURE SOLUTIONS $413M FY16 ADJ. EBITDA MARGIN 9.1% 5 YEAR REVENUE GROWTH +7% 18% FY16 REVENUE
Slide 25: Portalmill Factory, Melksham, UK
25 PORTALMILL FACTORY | MELKSHAM, UK ELA Furniture Solutions
Slide 26: POSH Factory, Dongguan, China
26ELA Furniture Solutions POSH FACTORY | DONGGUAN, CHINA
Slide 27: Bidadi Factory, Bangalore, India
27ELA Furniture Solutions BIDADI FACTORY | BANGALORE, INDIA
Slide 28: Dealer Share | Regional R&D
28ELA Furniture Solutions | Key Initiatives DEALER SHARE | REGIONAL R&D
Slide 29: Dealer Share | Collaborative Furniture
29 DEALER SHARE | COLLABORATIVE FURNITURE ELA Furniture Solutions | Key Initiatives
Slide 30: International Consumer Expansion
30 INTERNATIONAL CONSUMER EXPANSION ELA Furniture Solutions | Key Initiatives
Slide 31: Specialty Brands
31 Specialty Brands Steve Gane President, Specialty Brands
Slide 32: Specialty Brands overview
32 Design, manufacture and sale of high-craft furniture and textiles focused on architect and design specifiers GEIGER HERMAN MILLER COLLECTION MAHARAM Specialty Brands
Slide 33: Financial Metrics Specialty Brands
33 10% 33 Financial Metrics Specialty Brands 5 YEAR REVENUE GROWTH + 24% (GAAP) + 9% (organic) 10.3% FY16 ADJ. EBITDA MARGINFY16 REVENUE SPECIALTY BRANDS $232M
Slide 34: Innovative and Robust Product Development
34Specialty Brands | Key Initiatives INNOVATIVE AND ROBUST PRODUCT DEVELOPMENT
Slide 35: Maharam Category Expansion
35 Maharam Category Expansion RESIDENTIAL RUGS LEATHER Specialty Brands | Key Initiatives
Slide 36: Automation and Lean Enterprise
36Specialty Brands | Key Initiatives AUTOMATION AND LEAN ENTERPRISE
Slide 37: Architect and Designer Experience
37Specialty Brands | Key Initiatives ARCHITECT AND DESIGNER EXPERIENCE
Slide 38: Dealer Eco-System
38 Dealer Eco-System Jeremy Hocking EVP – Strategy and Business Development
Slide 39: Evolving Floorplate
39 EVOLVING FLOORPLATE Dealer Eco-System
Slide 40: Created Living Office Framework
40 CREATED LIVING OFFICE FRAMEWORK Dealer Eco-System
Slide 41: Developed Relevant New Products
41 DEVELOPED RELEVANT NEW PRODUCTS Dealer Eco-System
Slide 42: Acquired Industry Leading Brands
42 ACQUIRED INDUSTRY LEADING BRANDS Dealer Eco-System THE HERMAN MILLER GROUP
Slide 43: Digital Eco-System: Key Initiatives
43 DIGITAL ECO-SYSTEM Dealer Eco-System | Key Initiatives
Slide 44: Dealer Excellence Program
44 DEALER EXCELLENCE PROGRAM Dealer Eco-System | Key Initiatives
Slide 45: Innovation
45 Innovation Ben Watson Chief Creative Officer
Slide 46: Global Family of Brands
46 GLOBAL FAMILY OF BRANDS Innovation
Slide 47: Global Product Creation Excellence
47 Global Product Creation Excellence Innovation
Slide 48: Pipeline of Paradigm-Setting Products
48 Pipeline of Paradigm-Setting Products Innovation
Slide 49: Next Generation of Living Office
49 NEXT GENERATION OF LIVING OFFICE Innovation
Slide 50: Outlook
50 Outlook Jeff Stutz Chief Financial Officer
Slide 51: Compelling Financial Outlook: Revenue and Adjusted EBITDA
51 Organic revenue growth of 5% at a premium to North America Contract industry growth of 2.8%, and robust EBITDA growth over last 5 years Compelling Financial Outlook FY11 FY12 FY13 FY14 FY15 FY16 $1.9B $2.1B $1.8B$1.7B$1.6B FY11 FY12 FY13 FY14 FY15 FY16 $206M $235M$182M$180M$165M Revenue Adjusted
Slide 52: Estimated Annual Organic Revenue Growth
Opportunity for continued above-average revenue performance over the next three to five years Compelling Financial Outlook Market Growth 1-3% New Products and Initiatives 1-1.5% Consumer Growth 1-1.5% Estimated Annual Organic Revenue Growth 3-6% Plus Targeted Acquisitions Revenue 52
Slide 53: Cost Savings Initiatives
Compelling Financial Outlook 53 Cost Savings Initiatives OPERATING MARGIN OF: $25 TO $35M (BY FY20) BUSINESS UNIT SYNERGIES LOGISTICS OPTIMIZATION FACILITIES CONSOLIDATION GENERAL COST RATIONALIZATION > 10% OF SALES (BY FY20)
Slide 54: Capital Deployment Priorities
54Compelling Financial Outlook Capital Deployment Priorities INTERNAL GROWTH INVESTMENTS TARGETED ACQUISITIONS DIVIDEND SHARE REPURCHASE
Slide 55: Areas of Focus
Areas of Focus REALIZE SCALE LIVING OFFICE CONSUMER ©0060 LEVERAGE DEALER ECO-SYSTEM DELIVER INNOVATION DRIVE COST CAVING
Slide 56: Q&A
56 Q&A
Slide 57: Appendix
57 Appendix
Slide 58: Non-GAAP financial measures
58 This presentation contains Organic Sales Growth, Adjusted EBITDA, Adjusted EBITDA ratios, Adjusted Operating Earnings, and Adjusted Earnings Per Share, all of which constitute non-GAAP financial measures. Each of these financial measures is calculated by excluding items the Company believes are n
Slide 59: Reconciliation of Non-GAAP Measures: Organic Sales Growth
59Appendix –Reconciliation of Non-GAAP Measures Organic Sales Growth (Decline) by Reportable Segment ($ Millions); (unaudited) Sales, as reported Performance Adjustments Dealer Divestitures Cumulative foreign exchange Acquisition-base year Sales, pro forma Compound Annual Growth Rate, as reported Co
Slide 60: Reconciliation of Non-GAAP Measures: Adjusted EBITDA by Segment
60Appendix –Herman Miller Inc. Reconciliation of Non-GAAP Measures Adjusted EBITDA by Reportable Segment ($ Millions) (unaudited) Segment Operating Earnings Add: Allocated Depreciation & Amortization Add: Restructuring/Impairment Expenses Adjusted EBITDA Revenue by Segment Adjusted EBITDA Margin Seg
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